Samsung Buys Kickstarter-Funded Internet of Things Startup For $200MM

jfruh writes: In September of 2012, SmartThings took to Kickstarter with the promise of delivering an "Internet of things" package to backers, including a hub device that would control various home gadgets via the user's smartphone. They aimed to raise $250,000. They got $1.2 million. And now they've been bought by Samsung for a reported $200 million, as the South Korean electronics market tries to get a foothold into this emerging market.

Comments

Re:$200MM

[fisted]

It's obviously $200 worth of M&M's

Hesitant about Kickstarter and hardware

[Anonymous Coward]

Between this and the Oculus I just really don't feel like I feel sound in Kickstarting any sort of hardware these days. The reason I kickstart a project is so someone can get their idea to market without having to sell out to a large corporation. Certainly not to fund the R&D phase so a big multinational can waltz in and scoop up a finished product.

Re:Hesitant about Kickstarter and hardware

[dbc]

Who modded this insightful? Geez.. here are some clues:

#1: Sorry, when you risk what amounts to lunch money, that is not the same as venture capital risk. Nobody cares about lunch money. Somebody still cares about the $2 million round A money going down the toilet. VC's are judged on performance across a portfolio.

#2: Kickstarter isn't venture capital. You are promised a product, not a piece of the company. Get over it.

#3: Startups don't wine and dine anybody. They shamelessly beg with their hand out. VC's buy the would-be founders cheap lunch, literally, while they listen to the pitch, if you get that far.

#4: You have no idea what the rules and regulations are around "qualified investors". Legally, having more than 30 or so investors is a nightmare that no start-up can manage and still get work done. No startup can afford enough lawyers to do the SEC work needed to have more than a few "qualified investors".

#5: Kickstarter money is not the same as VC money because VC money comes with advice and connections. A VC needs to bring more than "dumb money" to be useful to a startup. Your $20 is worse that VC "dumb money". It is clueless money with wildly distorted expectations.

Kickstarter has changed the VC model, but not the way you think. Kickstarter is the new test market. It is how you show the VCs that your idea has traction, and to get the idea out in front of people to get it noticed. A successful kickstarter is the way you get somebody on Sandhill Road to buy you a sandwich while you pitch.

So the fact that you are disappointed that you didn't get a piece of the company for your lunch money that you spent shows that you really, really, don't undertand Kickstarter's place in the world. Your $20 is just you at the mall taking the "Pepsi Challenge". Your $20 is a market research data point. Which I, personally, find very motivational and empowering. Kickstarter is filled with ideas that I find exciting, and that I would really like to see happen. By pitching in $20, it is a way to show the people with enough money to make it really happen that it is something that I would like to see happen. That is your role as a Kickstarter patron. You are cheering for your team. Anything else you get out of it (like a product delivered only a few months late) is entertainment.

You want to be a VC? Do it the old fasioned way. Launch a successful startup, then take a few million of your own dollars and several million more dollars from some insurance companies, and use the expertise and contacts that you aquired doing your own start-up and help other people do the same thing. Oh... you haven't done a successful start up of your own yet? Luckily, you can still *drive* on Sand Hill Road, even if no one will give you an office there.

Actually, every VC I have ever met (and I've met a lot) has been very friendly, listens very well, and is extremely engaged in learning. But... they don't waste any time on the clueless. The best way to get a VC's interest and hold it is to teach them something they didn't know before. You need to learn the realities of the VC business before you start thinking you are ready to participate.